DeFi offers more than just liquidity
Bitcoin price has fallen, but investors still have plenty of opportunities to profit thanks to DeFi.
The development of DeFi has continuously attracted media attention throughout 2021, and to date, hundreds of billions of dollars of crypto assets are locked via protocols with various blockchain networks, bringing profits to their owners.
What began as a simple swap platform based on the Ethereum blockchain, which enables ERC-20 / ETH tokens to be exchanged without permission, has grown into a huge ecosystem of decentralized exchanges (DEX), yield farming, lending protocol and Uniswap Staking platform developed.
As development expands and older protocols become more established, new projects have emerged that incorporate more elements, from traditional finance to decentralized finance (DeFi), as digital technology gradually changes the global financial system.
Here are some ways for users to get in touch with DeFi beyond depositing into pools of liquidity or depositing funds into a credit log.
Trading in derivatives on the decentralized market
Cryptocurrency derivatives exchanges have long been the target of regulators, and once exchanges like BitMEX and Binance were subject to the law and revised operating methods, if they were to seek a more legitimate position. Or simply the floor owners don’t want to open the schedule and trade coins.
This problem has further increased the need for a decentralized derivatives exchange for traders and has led to the creation of protocols such as dYdX or Hegic that provide decentralized services without a centralized governance structure.
DYdX is an unattended perpetual futures exchange based on the Layer-2 StarkWare protocol and gives users access to futures contracts with up to 10x leverage on a large number of altcoins.
Hegic is an on-chain options trading protocol that uses hedging contracts and liquidity pools to offer options contracts that last up to 90 days and are settled in Ether (ETH), Wrapped Bitcoin (WBTC), or USD-Coin (USDC).
The maximum holding period for Hegic options has been reduced from 90 to 30 days. Any previously acquired options are not affected by this change.
The max. Is adjusted based on the current volatility in order to protect active LPs from selling vol too cheaply. pic.twitter.com/JiVBVH5xD2
– Hegic (@HegicOptions) September 8, 2021
The time is adjusted based on the current volatility to protect active LPs from being sold too cheaply. “
Both platforms provide users with access to advanced trading products without having to reveal their identity, as is required with centralized counterparties.
Bonding, rebase and APY tokens are extremely high
One topic that is emerging in financial discussions is the concept of creating a decentralized reserve currency without the control of a centralized government or financial institution.
Olympus aims to solve this problem through a decentralized autonomous organization platform (DAO) that offers staking and various bond services, including the ability to link Ether, MakerDAO (DAI), Liquidity USD (LUSD) and Frax (FRAX).
– OlympusDAO (@OlympusDAO) 09/22/2021
The Olympus affiliate process is essentially a mix of a fixed income product, futures and options. The bond is offered with an offer that outlines the terms of a transaction on a future date and includes a pre-determined amount of the protocol’s native token, OHM, which the affiliate will receive upon completion of the trial period.
Funds raised through bond services will be deposited into Olympus Treasury as collateral for the minted OHM tokens, helping to provide the underlying value of OHM so that it can be used as reserve currency or medium of exchange.
Once the linking process is complete, users can sell their OHM on the open market or participate in the Olympus protocol with a current yield of 7.299%.
Join Crowdloan on Kusama and Polkadot
Another way owners can leverage their digital assets while expanding the crypto ecosystem is by participating in parachain auctions in the Kusama and Polkadot ecosystems through a process called crowdloan (crowdfunding).
During the auction, various projects compete for one of the limited positions of the parachains, which connect the project directly to the main network of Kusma or Polkadot and facilitate the connection of all parachains in the ecosystem.
With Crowdloan, users who own KSM and DOT can add them to the pool the project uses to rent parachain positions and get their tokens back after a lock-up period (1 to 2 years).
current #Kusama Crowdloan Statistics:
~ 995k $ KSM participate in 16 projects
~ 88% (~ 875k $ KSM) contribute to the top 5 projects, which is ~ 175k. means $ KSM so far on average.
☛ These 88% correspond to ~ 78% of the KSM that contributed to the first 5 parachets.
These auctions are a huge success!
– Fabs (@fabsbags) September 21, 2021
- 995,000 KSM contributed to 16 projects
- 88% (875,000 KSM) contributed to the top 5 projects, which means an average of 175,000 KSM so far.
- These 88% or 78% of KSM contributed to the first 5 parachets.
These auctions were a huge success! ”.
In return for the KSM / DOT contribution, if the hodler cannot earn the staking reward during the token lockout period, the contributor will receive an amount of bonus tokens from the projects they support with a return.
This approach offers the possibility of generating profits with less risk for the owners, as all significant contributions are locked in a smart contract and repaid after a certain lock-up period. And because of the nature of the parachain auction process, well-developed and censored projects have a greater chance of winning the parachain auction rounds. For a player who doesn’t have a lot of experience researching a particular project, they can simply cash out their tokens to the top of the leading projects.
According to Cointelegraph